GroupM Cuts Ad Spending Forecast

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Citing an uncertain economy in Europe and the U.S., media buying giant GroupM has cut its forecast for global ad spending growth to 5.1% from the 6.3% forecast it made late last year.

For the U.S. market, GroupM said it expected ad spending in measured media to grow just 3.6%, down from its previous 4% forecast.

"We attribute the decline in U.S. ad spending to a number of factors, including a loss of economic momentum, the global deterioration from all continents, but particularly the Eurozone, and political and fiscal uncertainty at home for the election and beyond," GroupM chief investment officer Rino Scanzoni said in a statement.

On a global basis, GroupM said that 2011 spending hit $482 billion, up 5% from 2010. For 2013, it is predicting a 5.3% increase to $533.2 billion.

Digital media investments are growing faster than anticipated, according to GroupM, which sees an increase of 18% to $99 billion, up from a previously forecast 16% jump.

Digital media represents 20% of 2012 measured ad spending.

"Internet advertising is growing in every country, so powerful is its structural and evolutionary development," said GroupM futures director Adam Smith.

TV accounted for 43% of measured global media investment in 2011, a record high. Smith said the figure might represent a peak for TV ad spend because "the continued development of internet advertising, notably video, will now possibly nip at TV's nominal share, though some internet video investment will simply return to different pockets of the same TV vendors."

Print newspapers' share of advertising, meanwhile, hit a new low of 17% in 2011, and is expected to drop another percentage point in 2012 and 2013.

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